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TMI Blog2010 (9) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... ted after disallowing expenses incurred on dividend income Rs. 30,18,496/-, expenses for increase of share capital Rs. 11.00 lacs and software expenses Rs. 2,65,112/- on a total loss of Rs. 76,39,03,002/-, vide order dated 8.12.2006 passed u/s. 143(3)(ii) of the Income tax Act, 1961 (the Act). On appeal ld. CIT(A) while upholding the order passed by the Assessing Officer dismissed the assessee's appeal. 3. Being aggrieved by the order of the ld. CIT(A) the assessee is in appeal before us. 4. Ground No.1 is against sustenance of disallowance of expenses Rs. 30,18,496/- u/s. 14A, incurred for dividend income. 5. The brief facts of the above issue are that during the course of assessment proceeding it was observed by the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .208% of total income and at this rate, he worked out the expenses incurred by the assessee for earning dividend income at Rs. 30,18,496/- which he added to the total income of the assessee . On appeal, the ld. CIT(A) while relying on the decision of the Special Bench of the Tribunal in ITO vs. Daga Capital Management(P) Ltd. in ITA No.8057/Mum/2003 dated 20.10.2008 upheld the addition made by the Assessing Officer. 6. At the time of hearing the ld. Counsel for the assessee at the outset submits, that this issue is directly covered in favour of the assessee by the following orders of the Tribunal : 1) M/s. Oriental Insurance Co. Ltd. vs. ACIT 2009-TIOL-172-ITATDel (ITA No.5462 & 5463/del/03 for Assessment Year 2000-01 and 2001- 02) order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s paper book and the same has also been considered by the Assessing Officer in para 5.16 of the assessment order. By placing reliance on the judgment in Mcorp Global P. Ltd. Vs. CIT (2009) 309 ITR 434(SC) he submits that the Appellate Tribunal has no power to take back the benefit conferred by the Assessing Officer or enhance the assessment . He therefore, submits that the disallowance made by the Assessing Officer and sustained by the ld. CIT(A) be deleted. 9. We have carefully considered the submissions of the rival parties and perused the material available on record. We find merit in the plea of the ld. Counsel for the assessee that the Assessing Officer after examining the relevant details as discussed in para 5.16 and 5.17 of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. The brief facts of the above issues are that during the course of assessment proceeding on examination of balance sheet it was found by the Assessing Officer that the assessee has increased its authorised capital. The assessee was asked to submit the expenses related to increase of share capital and was also asked to explain as to why these expenses should not be disallowed being capital expenses. The Assessing Officer after considering the material available on record and in relying on decisions in Brooke Bond India Ltd. 225 ITR 798(SC), PSIDCL vs. CIT 225 ITR 792(SC) and CIT vs. Hindustan Insecticides Ltd. 250 ITR 338(Del.) disallowed the expenses of Rs. 11.00 lacs on account of increase in authorised capital and added to the total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer and the ld. CIT(A). 15. After carefully hearing the submissions of the rival parties and perusing the material available on record and keeping in view the ratio of the judgment of Hon'ble Supreme Court in Life Insurance Corporation of India supra, we find that there is no dispute that assessee company is engaged in the business of Life Insurance and the assessee has filed auditors report supported by actuarial valuation appearing at 1-44 of assessee's paper book, therefore, the provisions of sec. 44 read with rules in the first Schedule to the Income tax Act shall apply and the Assessing Officer has no power to do anything not contained u/s.44 of the Act. The income of the business of insurance is essentially ..... X X X X Extracts X X X X X X X X Extracts X X X X
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